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Do You Have A Hangup About Cross-Selling And Up-Selling?

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For the past few weeks, the Practice Builder Publishing Mastermind Group has been struggling with the concept of cross-selling and upselling of tax services, like it was some big conundrum that must be avoided.

Design_file02For sure, the leaders of the group, those with the most successful practices were able to voice their techniques and methods for generating additional internal sales, but the folks who need sales the most (or at least sound like they do) , seem to be struggling with the idea of how to implement an effective cross-selling or upselling program.

You’d think that by now, folks running their own practices would have read enough Peter Drucker to have memorized his famous quote that “The purpose of business is to create and keep a customer.”

Your purpose, as the owner of a bookkeeping, accounting or tax practice is not to do bookkeeping, or accounting or prepare tax returns, it is to get new clients, get them and keep them.

Sure, you may have to do some bookkeeping, some accounting, and prepare some tax returns, but that is not your purpose for existing. If that is your focus, then you are doomed to plad along struggling to keep your head above water.

If you want to succeed in business, and be able to advise your clients as to how to succeed in their business, then your every working moment must revolve around getting new clients, and keeping the clients you do have.

And, drum roll here, there is only one sure way to keep the clients you do have, and that is to contually be selling to them. New services, the benefits of existing services, expqnded services, whatever. You owe it to them. It is your duty to be ‘selling’ to your clients at every stage in your relationship with them.

Don’t get me wrong.

It is not just your duty to yourself and your practice, it is your duty to your client.

You see, your selling is all about solving a problem of the client.

It is not getting them to buy some service that you offer, it is about solving the needs of that particular client with a solution that you can provide.

You must be in an exploratory, needs analysis mode, at all times when working with a client, so that you can understand what needs they have that you have not provided a solution to as yet, and that you can provide a solution to. You must be able to craft a value proposition for this particular client, and present it to the client in a way that ensures that they understand your ability to solve a need of theirs, whether they have previously identified the need, or you have just identified it to them.

Just as the essence of selling to new prospects is the solving of a need that the prosect may or may not have identified previously, the essence of cross-selling and upselling is the solving of a need that the esisting client may or may not have previously identified. It’s the same thing.

In preparing to write this article, I reviewed the previous four Practice Builder Publishing brainstoming or mastermind calls (whatever we’re calling them this week), and examined the methods being used by the top producers, and the lower producers, trying to determine what was working as far as cross-selling and upselling was concerned, and what wasn’t.

The difference was simple.

The moment a top producer identified a need, or was presented with a need, by a client, they presented a solution. It may have been custom crafted, or more likely, an existing service they could offer as a solution.

CrossSelling01-300x386The top producers did not wait until the client was ‘ready to buy,’ they did not wait until the client had ‘time to sit down and talk.’ They presented a solution to an identified or perceived need, and explained to the client to the client what the problem was (if the client was not aware of the problem or need), and then they explained to the client how the solution or value proposition they were offering could solve the need.

The lower producers made excuses in an attempt to avoid presenting the client with their value proposition, usually because they had not finished the tasks involved in solving the needs that had previously been identified.

What these lower producers failed to acknowledge was that there were two possible outcomes if they waited to ‘make the sale.’ First, when the current need was satisfied, the client would have no relationship tying them to the practitioner, and the relationship would be terminated. The practitioner would be in a position where they were competing to regain a lost relationship.

Secondly, if they did not make the effort to identify a need and present a value proposition that would fill that need, then the client may be approached by a competitor, who would take all or part of the relationship.

I’ve mentioned this time and time again, how I discovered this reality in my own practice in the early 1990’s. How, being distraught that I was living through a consistent 20% client churn (which, to my chagrin, I later discovered was the accounting industry average for annual client churn), I approached my mentor, Ron Noll, a CPA out of Malvern, Pennsylvania, and he suggested the idea of offering additional services to my clients.

Not being skilled in the development of services, I took the only service I knew to offer at the time, and offered a payroll service to my existing clients, and developed a separate business to offer payroll services to non-client small businesses.

It wasn’t long before my client churn dropped to 10% per annum, resulting in not only a longer client life and client lifetime value, but the additional services increased my current revenues and the market value of my practice. (I was in the habit of starting and building up a practice, only to sell it out to capitalize the growth of a new practice.)

In today’s market, industry statistics show that you can achieve the same reduction in churn rate, but it requires an increase in the number of services you must offer. My experience preceded the maturation of the accounting practice marketing model, but the principles arre still valid.

I’ve discussed what cross-selling and upselling can do for you, but more importantly, I repeat, it is your duty to cross-sell and upsell to your client.

What do you think the clients reaction will be when they discover that they have a problem, which you have not identified, and which you have not presented them with a solution to?

Will they be happy? No.

Will they be receptive to a competitors offer to solve the problem? Yes.

Will you lose a client, and will the client be sending you referrals. You guess the answer to those.

And, scariest of all, is there a possibility that by not identiying the problem and suggesting a solution, that you are running the risk of preparer liability for failure to exercise due diligence.

Yes, by suggesting that it is your duty to cross-sell and upsell your client, I am also suggesting that a failure to identify client needs and suggest a solution to those needs, whether directly or by referral, you are skirting the limits of your due diligence responsibility.

What can you do about all this responsibility and opportunity?

All I want to do right now is to raise your awareness. To get you to thinking about how important it is to identify your client needs, and how you must be constantly crafting a solution to those needs and presenting it to your client in a way that will retain them as a client, at a higher level of revenues.

Remember, it is your sole function to acquire and keep clients. If, because of the stage you are at in your business growth, you also have to ‘do the work,’ that is of secondary importance. Of course there is no excuse for sloppy or shoddy work. If that happens, you will fail in the second part of your obligation, to keep your clients.

Some time in the next few weeks, I will be putting together an ebook on effective techniques you can use to start cross-selling and upselling. As soon as it is completed, I’ll drop back in here and post an update.

Stay tuned.

In the meantime, repeat after me, “The purpose of my business is to . . .”

Ta Ra Ta Ra Ta Ra!

Yes, that was a quiet blaring of trumpets.

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